Used car dealers to be deemed owners of their vehicle inventory: Govt

The Ministry of Road Transport and Highways (MoRTH) on Thursday issued a draft notification to promote ease of doing business and transparency in the sale and purchase of registered vehicles through dealers.

Currently, many issues were being faced during transfer of vehicle to subsequent transferee, disputes in regard to third party damage liabilities, difficulty in determination of defaulter etc., the ministry says, adding it has proposed amendments in Chapter III of Central Motor Vehicle Rules, 1989 to build a comprehensive regulatory ecosystem for the pre-owned car market.

This comes at a time when the pre-owned car market in India has been gradually gaining ground. The advent of online marketplaces, which are involved in buying and selling of pre-owned vehicles, has further given a boost to this market.

The ministry has clarified powers and responsibilities of a dealer in possession of registered vehicles. "Authorised dealer of registered vehicles shall be deemed owner of the motor vehicle and shall be solely responsible for all incidents related to such vehicle," states one of the key provisions of the proposed rules.

Dealers have been empowered to apply for renewal of registration certificate, renewal of certificate of fitness, duplicate registration certificate, NOC, transfer of ownership, of motor vehicles in their possession, the ministry says.

Pre-owned auto dealers shall maintain the record of inventory electronically, it adds.

The ministry says that no application for grant or renewal of authorisation certificate shall be refused by the registering authority unless the applicant is given an opportunity of being heard and reasons of such refusal are given in writing.

An authorisation certificate granted or renewed shall be valid for five years from the date of initial grant or renewal.

Dealers will also have to maintain a trip register of each vehicle. As a regulatory measure, maintenance of an electronic vehicle trip register has been mandated which would contain details of the trip undertaken such as trip purpose, driver, time, mileage etc.

An authorised dealer of registered vehicles shall not use any vehicle which is in his possession in a public place for any purpose other than for a reasonable trial or demonstration by or exhibition by or for the benefit of a prospective purchaser or for proceeding to or returning from a service centre with the objective of painting or for repairs or for proceeding to or returning from vehicle inspection and certification centre or PUC centre, says the ministry.

An authorisation certificate for the dealers of registered vehicles has also been introduced to identify the authenticity of a dealer.

The proposed rules also detail the procedure for intimation of delivery of vehicle between the registered owner and the dealer.

The ministry is seeking comments and suggestions from all stakeholders within a period of thirty days.